China’s flagship economic cooperation programme is making a comeback, with a focus on Africa, as revealed by a Reuters analysis of lending, investment, and trade data. Chinese investments in Africa saw a 114 percent increase last year, mainly driven by the energy transition and China’s economic revitalization plans. However, this relationship remains extractive, with Africa’s trade deficit with China expanding.
Public-private partnerships (PPPs) in Africa have not gained traction, leading to concerns of a one-sided relationship. China’s shift towards equity stakes in infrastructure projects aims to ensure economic viability. Despite challenges, the $668-million Nairobi Expressway project in Kenya serves as a successful model in Africa.
China’s engagement in Africa has reached $21.7 billion, with a strong focus on mining investments. While efforts to boost African exports face hurdles, including legal frameworks and risk perceptions, China aims to enhance cooperation through PPPs and trade initiatives.
Significant challenges persist, such as unprofitable projects and trade imbalances, highlighting the need for Africa to add value to its exports for sustainable economic growth.